This article starts from the limitations of the current L2 ecosystem and analyzes the specific practices of projects like Taiko, demonstrating how the innovative concept of Preconfirmation optimizes the transaction confirmation process and enhances user experience. It also reveals the challenges that current preconfirmation technology still needs to overcome in its development, including the dual challenges of technical improvement and ecological sustainability.

Original Title: 《Preconfirmation (feat. Taiko): Make Ethereum Fast for the First Time!》

Author: Ingeun Kim : : FP

Key Overview

• Taiko is a Layer2 network based on Based Rollup, aiming for complete interoperability with Ethereum while promoting the decentralization of sequencers. To address the delay in transaction finality within the Rollup mechanism, Taiko introduces the concept of "Preconfirmation." By assuring users of the inclusion and order of transactions in advance, preconfirmation effectively alleviates the inefficiencies in the transaction confirmation process of the Rollup mechanism, significantly enhancing user experience.
• In the Based Preconfirmation model, L1 validators provide guarantees for transaction results to users. Preconfirmers are required to stake collateral and adhere to a slashing mechanism to ensure the reliability of the system. L2 projects like Taiko have established reliable transaction finality by introducing preconfirmation mechanisms, creating a more convenient operational environment for services like DeFi that require real-time confirmation.
• Currently, multiple projects are involved in building the preconfirmation ecosystem. This technological advancement is expected to enhance the efficiency of the Ethereum L2 ecosystem, strengthen interoperability with Ethereum, and promote further expansion of the entire ecosystem.

Taiko is steadily moving towards its ultimate goal as an Ethereum Layer2 solution. To achieve this goal, Taiko prioritizes comprehensive interoperability with Ethereum, decentralized sequencers, and support for developers. Notably, Taiko achieves complete interoperability with Ethereum through the Based Rollup architecture, allowing anyone to participate as a sequencer, thus realizing the decentralization of sequencers. However, despite the advantages of the Based Rollup model, its structure still has some inherent inefficiencies.

This article will take Taiko as an example to delve into the concept of Preconfirmation. As a key component of the Layer2 technology stack, preconfirmation is an important step for the further development of Rollup.

Current L2 Efficiency Issues

With the expansion of the L2 ecosystem, numerous projects have emerged, bringing many new concepts and technology stacks. However, despite these significant advancements, L2 still faces some urgent efficiency issues, particularly in key areas affecting user experience, where improving efficiency becomes especially important.

Inherent Limitations of Rollup: Inefficient Transaction Finality Determination Process

L2 achieves scalability through Rollup, relying on the data availability and transaction processing of L1 platforms like Ethereum. However, Rollup has an inherent limitation: while it can independently complete transaction ordering and execution, all other processes still need to wait for L1's final confirmation.

This architecture ensures security and data immutability by directly utilizing L1's block generation and data availability. However, relying on L1 for final confirmation leads to slower transaction processing speeds and limited real-time confirmation capabilities, making it difficult to meet real-time demands from a user perspective.

Moreover, many L2 sequencers and validator nodes are still centralized. This centralization can lead to inefficiencies, such as longer transaction confirmation times and potential operational interruptions, thereby affecting the transaction processing efficiency of certain Rollups and causing confirmation delays.

Introduction of the Preconfirmation Concept

The introduction of the preconfirmation concept aims to address the inefficiencies in transaction finality confirmation within L2 networks. Preconfirmation allows users to receive transaction confirmations more quickly, alleviating the common delays and inefficiencies in the Rollup mechanism.

What problems does preconfirmation aim to solve?

In the Rollup mechanism, the confirmation process after users submit transactions to L2 always suffers from inefficiencies. Since centralized L2 sequencers cannot accurately guarantee when transactions will be confirmed on L1, users often face uncertainty regarding the order and results of their transactions. For example, users may have to wait a long time for their transactions to be included on L1, and if the transaction order is incorrect or the results are unsatisfactory, it may lead to financial losses from executed transactions.

In a highly volatile market environment, the issues of delays and order changes become even more pronounced, as users rely on arbitrage and DeFi services. In these cases, transaction delays or order changes can directly result in lost opportunities. Even users conducting ordinary transactions may lack confidence in the timing and order of final confirmations on L1, leading to doubts about the reliability and usability of the blockchain.

Therefore, the design goal of preconfirmation is to address these shortcomings, particularly providing a more convenient and reliable transaction experience for those users most affected by Rollup inefficiencies.

How does preconfirmation solve these problems?

Preconfirmation addresses these issues by providing users with guarantees of transaction inclusion, ordering, and execution. It offers "soft confirmations" to users through centralized L2 sequencers and issues preconfirmation certificates to ensure that transactions will ultimately be included on L1.

The main advantage of soft confirmation is its ability to enhance user experience. Users can immediately receive confirmation certificates after submitting transactions, ensuring that transactions are included on L1 in the expected order, reducing uncertainty, especially in fast-response transactions like arbitrage. Additionally, preconfirmation enhances user trust in the L2 system. As users gain confidence in the secure handling of transactions, the overall usage rate of the L2 ecosystem will also increase. Thus, preconfirmation plays a key role in improving the efficiency and convenience of Rollup processing.

Is Preconfirmation the Ultimate Solution?

Although soft confirmations from centralized sequencers can enhance user experience through expected ordering and results, they rely on trust in the sequencers. Without legal or technical enforcement, users can only depend on the reliability of the sequencers. This dependency introduces the possibility that transactions may not be included in the correct order or may not be included on L1 at all, failing to provide the stable guarantees users expect.

Interpreting the Based Preconfirmation Concept and Practice through Taiko

Taiko has invested significant effort into the implementation of Based Preconfirmation, as this approach aligns closely with the core characteristics of Based Rollup. If Based Preconfirmation can be successfully integrated into Taiko's framework, it will not only significantly reduce the delays in transaction finality but also enhance user experience. Furthermore, this improvement will activate various previously constrained services, enabling them to operate efficiently on the Taiko network.

Before delving into Based Preconfirmation, it is essential to review some key features of Taiko to comprehensively understand the applicability and advantages of this approach.

Taiko Case Analysis

Taiko fully demonstrates the core characteristics of Based Rollup. It not only achieves complete interoperability with Ethereum's infrastructure but also aims to fully align with Ethereum's security mechanisms. Taiko adopts the Based Rollup architecture, meaning it does not rely on centralized sequencers but instead depends on Ethereum validators to act as sequencers responsible for transaction and block ordering.

In other words, Taiko's sequencers are of the same type as Ethereum's block proposers. This design endows them with special responsibilities and incentive mechanisms, such as obtaining maximum extractable value (MEV) rewards and other benefits associated with the sequencer role. Therefore, when issues arise in Taiko's L2 sequencing process, these sequencers naturally bear corresponding responsibilities due to their vested interests in the Ethereum ecosystem. This mechanism creates a significant difference in operational responsibility between Taiko and other Ethereum L2 projects.

Additionally, it is worth noting that Taiko's Based Rollup model is designed as a "Based Contestable Rollup (BCR)," a structure aimed at incentivizing healthy competition. Through an open and permissionless design, Taiko ensures the decentralization of the system and allows anyone to participate, making the system fairer and more transparent.

Preconfirmation Based on Based Rollup

So, what does the preconfirmation model specifically designed for Based Rollup look like? The answer is "Based Preconfirmation." This model aims to replace the traditional soft confirmation mechanism with confirmations verified directly on L1.

Based Preconfirmation provides a system in which some L1 validators voluntarily participate and offer preconfirmation services. As sequencers, these validators provide users with verifiable predictions of Rollup transaction results. This approach offers users trustworthy guarantees of transaction inclusion and ordering, and these guarantees are directly based on L1, thereby enhancing the credibility and reliability of the Rollup process.

Justin Drake first proposed the concept of Based Preconfirmation and introduced a specific role called "Preconfer," which can provide users with signed guarantees that clarify the order and execution status of transactions. To ensure the reliability of these commitments, each preconfirmer is required to stake a certain amount of collateral. If they fail to fulfill their commitments regarding transaction order or execution status, they will face penalties under the slashing mechanism, which may result in the loss of part or all of their collateral.

The slashing mechanism has been widely applied in Ethereum's PoS staking to effectively curb malicious behavior. This mechanism not only strengthens the sense of responsibility among preconfirmers but also establishes a certain level of trust between users and preconfirmers.

Two situations can lead to preconfirmers facing slashing penalties:

1. Liveness Faults: If a preconfirmer fails to include a user's preconfirmed transaction on the chain for any reason, a liveness fault occurs. Since liveness faults are not always intentional, the penalties are relatively mild. These faults may arise from network issues or interruptions in the L1 or L2 blockchain, preventing transactions from being correctly included on the chain. To protect honest preconfirmers from undue penalties, the penalty amounts for liveness faults are typically negotiated between users and preconfirmers.

2. Safety Faults: If a preconfirmed transaction is included on the chain but the result is inconsistent with the user's original request, a safety fault occurs. This inconsistency is entirely the responsibility of the preconfirmer, so penalties for safety faults are usually more severe. The preconfirmer's collateral will be fully forfeited, regardless of whether the issue was intentional.

To become a preconfirmer in the Based Preconfirmation model, a node (usually an L1 block proposer) must accept the conditions of these slashing mechanisms and stake the required collateral. Once approved, the preconfirmer can provide services to users and earn income by charging service fees.

This fee model offers significant convenience to users, allowing them to bypass the inherent delays in the final confirmation of Rollup transactions. For example, after a user submits a preconfirmed transaction through a personal wallet, they can immediately receive a confirmation certificate from the preconfirmer.

Preconfirmers participating in Based Preconfirmation not only gain additional income through service fees but also help optimize the transaction confirmation process of Rollup. This model not only enhances user experience but also provides a reliable and efficient transaction finality solution for the entire L2 ecosystem, further increasing its appeal and practicality.

Why are users willing to pay for preconfirmation?

This is closely related to the core purpose of preconfirmation. Users are willing to pay for preconfirmation because it directly addresses the inefficiencies in the transaction finality process of Rollup, providing significant convenience.

For instance, when users submit preconfirmed transactions on the L2 blockchain through personal wallets, standard transactions may need to wait for final confirmation, while users requesting preconfirmation can immediately receive guarantees from preconfirmers, completing transactions without delay. At this point, users may even see a green checkmark in their wallet interface, clearly indicating that the transaction has been successfully completed.

Taking DeFi services as another example, when users exchange tokens on an L2 DeFi platform, preconfirmation can provide additional assurance for the related transactions. Typically, the quoted exchange rate or fees for transactions may differ from the actual results due to delays. However, with preconfirmation, users can enjoy a fast and efficient transaction finality process, reducing the discrepancies between expected conditions and actual results, thus obtaining a more reliable service experience.

These application scenarios not only enable developers to provide more precise services but also offer users a smoother and more convenient experience. This dynamic further supports the expansion of the L2 ecosystem while contributing to the growth of the broader L1 ecosystem. Additionally, for sequencers of Based Rollup, the extra income brought by preconfirmation provides a substantial profit model. This design effectively addresses some traditional weaknesses of Based Rollup, making it an ideal choice for sequencers, combining reliability with attractiveness.

What challenges does Based Preconfirmation face?

Based Preconfirmation remains a highly regarded research area within Rollup-driven Layer2 projects represented by Taiko. Although this mechanism provides a clear solution for enhancing L2 performance and scalability while maintaining decentralization, it still faces several challenges in practical application that need to be addressed for broader adoption.

First, when Preconfers submit transactions to the block, users may not receive absolute guarantees of transaction inclusion. Although preconfirmers provide guarantees for transactions by staking collateral, this mechanism still cannot completely resolve issues where transactions fail to be included due to external interruptions. Especially in cases where the transaction value exceeds the preconfirmer's staked amount, preconfirmers may abuse their authority to selectively include or exclude certain transactions, leading to potential risks.

Another significant challenge is the profit model based on preconfirmation. The primary source of income for preconfirmers is the fees paid by users for preconfirmation. However, if the number of preconfirmers is insufficient or their participation is not high enough, it may lead to market centralization and monopolistic tendencies. In such cases, preconfirmation fees may be artificially inflated, increasing the costs for users to conduct fast and efficient transactions, thereby threatening the healthy development of the preconfirmation ecosystem.

It is worth noting that the concept of Based Preconfirmation is relatively new, having been proposed only about a year ago. To make it a "key tool" for maximizing the speed and efficiency of Rollup-driven L2 solutions, it will require some time for practice and refinement. However, as Rollup has firmly established itself as a core component of Ethereum's scalability, further exploration of preconfirmation to enhance performance marks an important step in the development of L2 technology.

In particular, Taiko has made significant progress in promoting the implementation of Based Preconfirmation. At the same time, Taiko has collaborated with several partners, including Taiko Gwyneth, Nethermind, Chainbound, Limechain, Primev, and Espresso, to explore and develop application scenarios for Based Preconfirmation. These collaborations aim to drive the further evolution of the L2 ecosystem, with more details to be discussed in subsequent chapters.

Overview of the Preconfirmation Ecosystem: Process Diagram and Project Exploration

In this chapter, we will explore which projects are actively researching and advancing the development of preconfirmation technology within the Rollup-driven L2 ecosystem. Since this ecosystem is still in its early development stage, we will use a flowchart to visually present and understand the specific processes of preconfirmation.

Preconfirmation Flowchart

Preconfirmation is a complex process that requires close collaboration between L1 and L2, involving multiple roles, each with specific responsibilities. To facilitate a more intuitive understanding of this process, I have created a flowchart for a brief overview. It is important to note that this flowchart aims to explain the overall logic, so it does not strictly differentiate between the different characteristics of Rollup and Based Rollup, but rather focuses on the general process at a foundational level.

Before understanding the specific steps in the flowchart, let’s get to know the various roles involved in the preconfirmation process and their functions:

• User: Individual users utilizing the L1 or L2 network, responsible for creating and submitting transactions. If users wish to obtain preconfirmation guarantees, they will send their completed transactions to the preconfirmer.
• Preconferrer: In the preconfirmation process, the preconferrer is responsible for reviewing the transaction and verifying its validity, subsequently providing preconfirmation guarantees to the user. Through preconfirmation, users can quickly obtain status guarantees for their transactions before final settlement. If nodes do not qualify for preconfirmation, they act as non-preconf actors, primarily handling ordinary transactions rather than preconfirmed transactions, similar to standard validator nodes.
• L1 Validator: Responsible for the final validation of transactions and blocks on the L1 network. Once the preconferrer submits the transaction data, the L1 validator will verify it and record the final data on the L1 blockchain, ensuring the integrity of the transaction and compliance with consensus rules.
• Preconfirmation Challenge Manager: When disputes or issues arise in the preconfirmation process, this role is responsible for investigating the problems and taking appropriate measures to resolve disputes. This role plays a key part in maintaining the fairness and reliability of the preconfirmation process.

Now, let’s outline the specific process of preconfirmation in the order of the flowchart:

1. The user sends a transaction request to the preconferrer among the preconfirmation participants to initiate the preconfirmation process.
2. The preconferrer reviews the transaction and sends a preconfirmation receipt, promising the user that the transaction will be included in an L1 block, thus providing initial final confirmation assurance.
3. The preconferrer submits the transaction data that needs to be included in the L1 block to the L1 validator. This data may be a single transaction or aggregated data processed by the L2 sequencer.
4. The L1 validator verifies the submitted transaction data or aggregated data and records it in the L1 block, ensuring it complies with blockchain consensus rules.
5. After a period, the L1 block containing the transaction data or aggregated data reaches finality, and the transaction is officially confirmed.
6. Users can check the final result of the transaction through L1 nodes and, if necessary, use relevant information to raise any potential preconfirmation disputes or challenges.
7. If a transaction is not correctly included on L1 as promised, the preconferrer will face penalties from the preconfirmation challenge manager, such as having their collateral slashed or their staked assets frozen.

Related Project Exploration

The following will analyze the main projects actively participating in the preconfirmation ecosystem and their relevant roles in the process. Although these projects occupy specific roles in the flowchart, their actual responsibilities may vary slightly. Therefore, this overview aims to provide a foundational understanding and serve as general guidance. To maintain clarity, projects within each category are listed in alphabetical order.

Preconfer Validators

• Astria: Astria is dedicated to replacing centralized sequencers with a decentralized sequencer network that supports multiple Rollups sharing this network. This design provides Rollups with stronger censorship resistance, faster block finality, and seamless cross-Rollup interactions. To achieve rapid block finality, Astria introduces preconfirmation capabilities, enabling Rollups to offer quick transaction confirmations and enhance censorship resistance, significantly improving user experience.
• Bolt by Chainbound: Bolt is a preconfirmation protocol developed by Chainbound that provides Ethereum users with near-instant transaction confirmation services. Its operation is based on a trustless participation mechanism and economic collateral, while being compatible with existing MEV-Boost PBS pipelines, creating new revenue opportunities for proposers. The core feature of Bolt is L1 preconfirmation, which provides instant finality for basic transactions (such as transfers and authorizations), thereby enhancing user experience. By shifting the responsibility for transaction inclusion from centralized block builders to proposers, Bolt enhances the system's censorship resistance. Meanwhile, the collateral proposer registration mechanism ensures a trustless environment that flexibly supports various types of smart contracts.
• Espresso System: Espresso System is a protocol dedicated to enhancing interoperability within the blockchain ecosystem. It employs the HotShot Byzantine Fault Tolerance (BFT) consensus protocol to achieve rapid finality of transaction ordering and data across multiple chains. Espresso System includes Espresso Network and Espresso Marketplace, which work together to provide fast transaction finality and efficient interoperability, aiming to improve the scalability and security of the blockchain ecosystem.
• Ethgas: Ethgas is a market for trading block space, with transaction matching managed by a centralized system and on-chain processes executed via smart contracts. Ethgas offers two main functions: inclusion preconfirmation (ensuring transactions are included within a specified Gas limit) and execution preconfirmation (ensuring transactions reach a specific state or outcome). Ethgas focuses on protecting transaction privacy in block space trading and is known for its neutrality in operations.
• Luban: Luban focuses on developing a decentralized sequencing layer to connect transaction data between the Ethereum network and Rollups. This sequencing layer is designed as a decentralized system that separates the roles of proposing and executing. Luban's preconfirmation capabilities significantly enhance transaction reliability by ensuring the executability of transactions before they are included in the Ethereum network, while also helping to optimize key factors such as transaction fees, Gas prices, and MEV.
• Primev: Primev is developing a proposer network integrated with MEV, combining preconfirmation with MEV capabilities to build an efficient and reliable peer-to-peer network. This network records commitments for Ethereum transaction execution and incentivizes proposers through reward or penalty mechanisms. Primev allows MEV participants to set specific execution conditions for their transactions, while block builders and validators can commit to meeting these conditions, ensuring transaction preconfirmation. Based on EIP-4337, Primev supports flexible preconfirmation and Gas fee options, enhancing transaction processing efficiency and further optimizing user experience.
• Puffer Unifi: Puffer Unifi's Actively Validated Services (AVS) are built on EigenLayer and focus on addressing preconfirmation challenges within the Ethereum ecosystem, particularly in the architecture of Based Rollups. Puffer Unifi AVS leverages EigenLayer's restaking capabilities to support the preconfirmation participation mechanism, aiming to enhance the efficiency of transaction finality. As Based Rollups evolve, the demand for reliable preconfirmation providers continues to grow, and Puffer Unifi AVS aims to meet this demand. Its ultimate vision is to achieve efficient preconfirmation without altering the core protocol, thereby promoting sustainable growth within the Ethereum ecosystem.
• Skate: Skate's preconfirmation AVS relies on restaked assets on EigenLayer to provide economic security for all cross-chain operations. This AVS verifies the bundled data and information required for cross-chain transactions, which are then signed and prepared for execution by Skate's relayers. Through this process, Skate AVS achieves data preconfirmation, significantly improving the reliability and efficiency of cross-chain transactions.
• Spire: Spire's Based Stack is a Rollup framework for Based Ethereum, designed to support developers in building application chains (App Chains). This framework allows application chains to interact directly with Ethereum and customize their sequencing methods, supporting features such as cross-chain exchanges while optimizing user experience through preconfirmation. Based Stack supports various execution environments, ensuring the sequencing revenue of application chains and maintaining compatibility with traditional shared sequencers. As an open-source project, Based Stack provides developers with the complete tools and resources needed to build and manage application chains, thereby facilitating application chain development and interoperability within the Ethereum ecosystem.
• Taiko Gwyneth: Taiko Gwyneth is a Rollup design being developed by Taiko, classified as a Based Rollup architecture. Its goal is to achieve full interoperability with Ethereum while managing transaction sequencing directly on Ethereum. This design fully leverages Ethereum's security and decentralization features while providing high throughput and rapid final confirmation. Currently, Taiko is operating a proposer mechanism to assist in block creation and exploring preconfirmation mechanisms to promote profitable block production within the community. This mechanism aims to optimize block time scheduling and data publishing efficiency. To achieve these goals, Taiko is collaborating closely with projects such as Nethermind and Gattaca.

L1 Validators

• Chorus One: Chorus One is a project that provides validation services and infrastructure for blockchain networks, focusing on staking services across multiple protocols to enhance network stability and security. As an L1 validator, Chorus One's responsibilities include validating transactions and generating blocks, thereby improving the overall reliability and efficiency of the network. Recently, Chorus One has shown great interest in preconfirmation technology, even hosting related thematic events during Devcon 2024.

Research

• Nethermind: Nethermind is a project dedicated to developing Ethereum clients and tools, with the core goal of enhancing the performance and stability of blockchain networks. By introducing advanced optimization techniques, Nethermind actively promotes the improvement of transaction throughput on the Ethereum network. Regarding preconfirmation technology, Nethermind has been conducting in-depth research and has submitted a proposal to Taiko's funding program aimed at accelerating the deployment of preconfirmation features on the Taiko mainnet. This proposal is based on Nethermind's RFP-001 project and is implemented in two phases: the first phase will test the preconfirmation feature among a limited number of authorized participants; the second phase plans to gradually expand the application scope of preconfirmation.

Looking Ahead

Taiko and many Layer2 projects based on Based Rollup, whether or not they adopt the Based Rollup architecture, are striving to optimize the inefficient transaction finality processes in traditional Rollups. By introducing the concept of preconfirmation, these projects are building a transaction confirmation system that allows users to confirm transactions more quickly and reliably. Through this approach, these projects continuously explore how to enhance user experience and build user trust.

Taiko fully leverages its position as a Layer 2 project based on Rollup to actively promote the implementation of the Based Preconfirmation mechanism, thereby achieving comprehensive interoperability and decentralization with Ethereum. By providing users with fast and reliable transaction finality guarantees, Taiko significantly improves transaction processing speed and reliability, thereby greatly enhancing user experience.

However, industry experts, including Ed Felten from Arbitrum, point out that there is still a lack of mature middleware that can fully support preconfirmation. This indicates that the maturity of preconfirmation technology and the profit model for preconfirmers still face challenges that need to be further addressed.

As described in this article, an increasing number of projects and participants are actively entering the preconfirmation field, each bringing unique innovative solutions aimed at enhancing the performance and efficiency of Ethereum Layer2. This trend aligns with the general principle of continuous optimization following the initial implementation of system concepts. I believe this stage marks an important milestone in the evolution of L2 systems and represents an exciting positive development within the current L2 ecosystem.

By enhancing user convenience through preconfirmation, there is potential for profound impacts not only in speed and efficiency-focused areas such as DeFi and gaming but also in reconnecting Ethereum with previously fragmented ecosystem parts by improving Ethereum Layer2's performance. This performance enhancement may enable more Type-1 Ethereum Layer2 projects to achieve deep integration with Ethereum, thereby unlocking potential that was previously difficult to realize due to speed limitations. These advancements are bound to have a far-reaching impact on the entire Ethereum ecosystem.

Preconfirmation remains a challenging and rugged path. However, pioneers like Taiko are rising to the challenge, focusing on providing users with greater convenience. Innovation has never been easy, but as a supporter of Ethereum and its Layer2 ecosystem, I extend my sincere respect and encouragement for their efforts.

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